Employee benefit axed by Treasury

by Stephanie Zillman24 Oct 2012

This week’s announcement by the Treasurer means an end to the concessional tax treatment of ‘in-house benefits’ used in salary packaging arrangements.

As of the 22nd of October, no new in-house benefit arrangements may be entered into, but for those who have existing in-house benefits in place, these arrangements can continue until 1 April 2014.

For one salary packaging expert, the end of the tax concession is sad news for employees and employers alike, and came without warning. “In-house benefits have allowed some employees to purchase up to $1,333.00 per annum tax free of either goods or services that their employer provides to the general public. It was essentially seen as a benefit that employees received for buying directly from their employer,” Jim McNeilly from Selectus said. He added that many employees saw the tax savings received from in-house benefits as a reward for supporting their employer.

Depending on their taxable salary, most employees will lose between $453 and $620 per annum. The majority of employees who utilised the in-house benefits were middle income earners with salaries of between $50,000 and $80,000.

McNeilly told HC that the move by Treasury was unexpected, and the first employers heard of this was in the actual Treasury announcement.


  • by HR 24/10/2012 2:57:13 PM

    Is it surprising that there was no consultation or discussion? That's the way this government seem to operate. The policies never seem to support the strategies. Oh you want skilled migrants to address talent shortages- let's cut LAFHA! We have an ageing population- oh let's take away incentives for people to contribute to super!!!

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